Abu Dhabi National Oil Company (Adnoc) has awarded a huge offshore contract to United Arab Emirates-based fabrication giant National Petroleum Construction Company (NPCC) for the long-term development of its Umm Shaif offshore oilfield.

The emirati state-owned giant confirmed the award on Wednesday and said the “Long Term Development Plan – Phase 1’ (LTDP-1) engineering, procurement and construction contract was awarded by Adnoc Offshore to NPCC after a competitive tender process”.

The contract award is valued at “$946 million (3.47 billion emirati dirhams),” and aimed at the strategic long-term development of the Umm Shaif field, it added.

“The scope of the award covers engineering, procurement, fabrication, installation and commissioning activities required to maintain Umm Shaif’s 275,000 barrels per day crude oil production capacity, increase efficiencies and enhance the field’s long-term potential,” the company noted.

The Umm Shaif EPC contract, which is expected to be completed in 2025, comprises two packages for network expansion and new wellhead towers, Adnoc said.

“The first package includes modifications and extension of existing facilities with the installation of new subsea cables and pipelines for debottlenecking,” the company noted.

The second one includes the “design of three lean wellhead towers with associated new pipelines”.

Over 75% of the total award value will flow back into the UAE economy under Adnoc’s In-Country Value programme, ensuring that more economic value remains in the country from the contracts it awards, it added.

Strategic initiative

Yaser Saeed Almazrouei, Adnoc’s upstream executive director, said the offshore award will “maximise efficiencies while maintaining future output and supporting Adnoc’s strategic objective of 5 million bpd of oil production capacity a day by 2030”.

Ahmad Saqer Al Suwaidi, the chief executive of Adnoc Offshore said the contract is a key contributor to the company’s plans as it builds its “production capacity to over 2 million barrels a day in the coming years”, supporting the group’s smart growth strategy.

Upstream reported in November last year that two international contracting companies were battling it out for the prized Umm Shaif EPC contract.

A grouping led by Indian engineering giant Larsen & Toubro with Italy’s Saipem, was the other key bidder in the tender process, Upstream understands.

Investment plans

Adnoc last month announced a significant increase in its oil and gas reserves and outlined plans to invest $127 billion through 2026 as the state-owned giant embarks on multiple expansion projects in the emirate.

The company earlier said that its domestic reserves have increased by an additional 4 billion barrels of oil and 16 trillion cubic feet of natural gas.

Abu Dhabi is performing multiple greenfield and brownfield developments aimed at ramping up its oil production capacity to 5 million bpd by 2030, up from 4 million bpd.

Some of the key offshore oilfields in Abu Dhabi including — Upper Zakum, Lower Zakum, Umm Shaif and Belbazem — are likely to play a crucial role in its plans.

Adnoc is carrying out capacity expansion projects at each of these fields, but some projects are still thought to be in the initial engineering phase, project watchers said.

Sustaining production

The Umm Shaif LTDP-1 project aims to sustain oil production from the offshore field until 2028 and is a key part of the emirate’s strategy to achieve its output capacity growth target.

Adnoc is also expected to initiate work within a year or two on the multi-billion-dollar second phase of the Umm Shaif long-term development project.

This programme is intended to boost oil production capacity at the field to as much as 360,000 bpd on a long-term basis.

French giant TotalEnergies, state-owned PetroChina and Italy’s Eni hold a combined 40% stake in the new Umm Shaif and Nasr concession, with the majority stake of 60% held by Adnoc.